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Global Trends & Factors That Will Affect Logistics and Transportation

Why and how logistics, transportation, and supply chain professionals must adopt digital and technology to thrive as the world changes.

Efficiency is the most important aspects of a business. Saving time for consumers and your company is a win-win for all. Better tools created by new digital technologies that are getting more advanced each day is what will lead logistics enterprises to better operating ratios. Paper-based documentation will decrease significantly as sustainability and digital become the foundational parts of best-run enterprises.

Sustainability (Transparency)

With eco-friendly initiatives gaining favor, companies are looking for ways to reduce their carbon footprint. Customers, shareholders, and government agencies are becoming more vigilant about the practices that they use to fuel their operations. Remaining compliant to environmental policies while scaling growth is an essential factor for business success.

Digital Adoption

Technology enhancements provide increases in productivity and transparency. Specifically, blockchain is a secure way for data to be accessible to executives, management, staff, customers, and shareholders. Although digital products might meet customer expectations, new processes introduce a whole new set of challenges such as keeping data secure with proper cybersecurity.

Urbanization & Talent Acquisition

The global population is expected to increase from 7.4 billion to 10.6 billion by 2050. Natural population growth will increase urban density and make delivery accuracy more important. Hiring costs will increase while the pool of prospects also becomes larger. Onboarding employees with the right skill sets will become one of the most important parts of this transformation.

Improved Customer Service & Company Productivity

To retain existing customers and acquire new ones, companies must improve the speed of order fulfillment while continuously decreasing costs. Digital advancements mean increased expectations from customers, which includes efficient order fulfillment and more transparency for a seamless supply chain. This becomes a competitive advantage as the benefits of customer satisfaction and productivity compound over time. This will allow those successful adopters business to dedicate more time to solve mission-critical challenges. Below we highlight different emerging technologies and how they can be used in logistics enterprises to further advance a competitive advantage.

Blockchain

Transparent distribution of data allows visibility for manufacturers and customers alike. Trust is increased across the supply chain because data is available in real-time. Information on commerce and transport activity can be updated on domestic and international cargo.

AR (Augmented Reality) Integration

Perhaps the most important part of the process is shipping inventory from the warehouse or distribution center. Hiring warehouse workers while making sure they ship out correct orders is the issue. Augmented Reality gives employers more insight, by making sure the right products are shipped while reducing the time and operational cost of the order entry and manifest processes. Screened real-time data, graphics, and instructions guide employees most efficiently. For example, Samsung saw a 10% reduction in errors and a 22% increase in productivity after deploying AR in their warehouses.

Robotics

Deployment of robotic technology can be used to cut costs and raise productivity in a warehouse setting.
Previously mentioned AR software can be integrated with Robotic machinery. From the previously seen results, there will be a further reduction of incorrect orders and another increase in productivity. The margin of error for robots is significantly lower when robots are programmed to do the same tasks as humans. Jobs will not be lost but reengineered. The workforce of the future will change from warehouse workers to AR specialists and robotic programmers.

Autonomous Transportation

Driverless trucks and cars will change how goods are delivered. Dependency on humans will decrease while cost-effectiveness and yield will both increase. Autonomous vehicles will be able to make deliveries for prolonged periods of time, due to their long battery life. Some may be solar-powered, so as long as they receive solar energy they are able to make deliveries. Data collected via sensors, RFID (radio frequency identification), barcode, and remote devices will create a seamless way for management to track the progress of autonomous vehicles while on the road.

IoT (Internet of Things) Solutions

Real-time updates powered by (IoT) Internet of Things is a digital transformation that is valuable for logistics companies. Smart mailboxes with sensors inside can detect when packagers arrive while making sure they reach the intended person. Delivery drivers will also save time which will allow more orders to be fulfilled during the same shift. Customers benefit by having push notifications or emails sent directly to their phones when packages and loads arrive. This is an example of technology benefits for all involved in logistics transactions, from manufacturers to consumers.

Big Data Analytics

From the moment customers make a purchase to the second it arrives at their doorstep, data is being exchanged. Analytics can benefit companies by processing how the system best functions. Beginning with warehouse inventory and ending with parcel or consignee delivery, every piece of data can be analyzed by logistics firms so executives and managers can make informed decisions about how to best serve customers.

Saas (Software as a Service)

Across the board, all of these different technologies needs software to keep them functioning. Saas creates a way for different processes to integrate and run optimally. Ideally, the same software is to be used in warehouse, transportation, and delivery. However, we are at the forefront of these technologies being incorporated into business models which can create concern for IT managers. There has yet to be software that vertically integrates the entire logistics process.

Business Models

While these new operational tools are being put into practice to meet strategic goals, companies must adjust their business models to reap the benefits that come with using sophisticated technology.

Digital sales are the backbone for businesses and understanding the motivation behind purchases can make or break a company. Analyzing data to understand existing customer habits can create a way for companies to incentivize buyers to spend more. This also is an opportunity to recognize which products and services are needed to acquire new clients and gain access to untapped markets.

Customer Specific Platforms rely on a database of customer information such as quotes, orders, shipping, and tracking. Once this data has gone through analytics software, this allows for systems to allow clients to be matched with service providers using the data gathered by the enterprise’s big networks. This can be a decision-maker for larger partnerships of buyer-seller relationships.

Execution specialists provide clearly defined services focusing on the physical aspects of shipping on an online platform. This includes packing, labeling, and documentation. For example, the Amazon fulfillment division specializes in sending out packages to buyers. Capacity optimization through smart tech uses assets to optimize services offered through IoT services. Creating an ecosystem that works symbiotically through containers, trucks, trains, ships, and aircraft will produce the best results.

Each business model provides value in a different way. Some digitize either operations or customer experience. Others enable scalable ecosystems of partnerships. Exploring different business models based on the company’s specialization will offer ways to positively impact EBITDA.

Digital disruption must be met with technological adjustments for logistics and transportation companies to survive the rapidly changing landscape. In a study done by Accenture, only 28% of transport and logistics companies say that they have adopted advanced technology. Projections predict that the volume of goods shipped will quadruple by 2050. Companies that aren’t able to manage this significant increase will face the stark possibility of becoming obsolete and losing significant market share.